Wednesday, December 03, 2003

Rights and Reason: Howard Dean's Capitalism

This Monday, Democratic presidential frontrunner Howard Dean vowed to "break up giant media enterprises" out of a concern over "how deeply media companies can penetrate every single community" while a guest on Hardball with Chris Matthews. Dean says this is wholly compatible with capitalism.

DEAN: [F]irst of all, 11 companies in this country control 90 percent of what ordinary people are able to read and watch on their television. That’s wrong. We need to have a wide variety of opinions in every community. We don’t have that because of Michael Powell and what George Bush has tried to do to the FCC.
MATTHEWS: Would you break up Fox?
(LAUGHTER)
MATTHEWS: I’m serious.
DEAN: I’m keeping a...
MATTHEWS: Would you break it up? Rupert Murdoch has “The Weekly Standard.” It has got a lot of other interests. It has got “The New York Post.” Would you break it up?
DEAN: On ideological grounds, absolutely yes, but...
(LAUGHTER)
MATTHEWS: No, seriously. As a public policy, would you bring industrial policy to bear and break up these conglomerations of power?
DEAN: I don’t want to answer whether I would break up Fox or not,
because, obviously
(CROSSTALK)
MATTHEWS: Well, how about large media enterprises?
DEAN: Let me-yes, let me get...
(LAUGHTER)
DEAN: The answer to that is yes. I would say that there is too much penetration by single corporations in media markets all over this country. We need locally-owned radio stations. There are only two or three radio stations left in the state of Vermont where you can get local news anymore. The rest of it is read and ripped from the AP.
MATTHEWS: So what are you going to do about it? You’re going to be president of the United States, what are you going to do?
DEAN: What I’m going to do is appoint people to the FCC that believe democracy depends on getting information from all portions of the political spectrum, not just one.
MATTHEWS: Well, would you break up GE?
(APPLAUSE)
DEAN: I can’t-you...
MATTHEWS: GE just buys Universal. Would you do something there about that? Would you stop that from happening?
DEAN: You can’t say-you can’t ask me right now and get an answer, would I break up X corp...
MATTHEWS: We’ve got to do it now, because now is the only chance we can ask you, because, once you are in, we have got to live with you.
(LAUGHTER)
DEAN: No.
MATTHEWS: So, if you are going to do it, you have got to tell us now.
(CROSSTALK)
MATTHEWS: Are you going to break up the giant media enterprises in this country?
DEAN: Yes, we’re going to break up giant media enterprises. That doesn’t mean we’re going to break up all of GE. What we’re going to do is say that media enterprises can’t be as big as they are today. I don’t think we actually have to break them up, which Teddy Roosevelt had to do with the leftovers from the McKinley administration.
(CROSSTALK)
MATTHEWS: ... regulate them.
DEAN: You have got to say that there has to be a limit as to how-if the state has an interest, which it does, in preserving democracy, then there has to be a limitation on how deeply the media companies can penetrate every single community. To the extent of even having two or three or four outlets in a single community, that kind of information control is not compatible with democracy.
MATTHEWS: How-how far would you go in terms of public policy?
(APPLAUSE)
MATTHEWS: This is not-what you describe is not laissez-faire.
It’s not capitalism.
DEAN: It is capitalism.
MATTHEWS: How would you-what would you call it?
DEAN: I am absolutely a capitalist. Capitalism is the greatest system that people have ever invented, because it takes advantage of bad traits, as well as our good traits, and turns them into productivity. But the essence of capitalism, which the right-wing never understands—it always baffles me-is, you got to have some rules. Imagine a hockey game with no rules.
(LAUGHTER)
MATTHEWS: Would you-would you
(CROSSTALK)
DEAN: Nobody benefits. Nobody benefits. So you have got to have reasonable rules. And the rules have to protect everybody in the game.
So Howard Dean’s definition of capitalism includes using the presidency to break up News Corporation and other media companies (but not GE) on “ideological grounds.” Whether this means Dean would break up these companies because he disagrees with them ideologically, or that he simply believes he has the right to shatter corporations that violate his vision of “democracy,” Dean has again revealed that he intends to put yet another part of the American economy under his boot.

Let’s reduce Dean’s statement to exactly what it is. A capitalis earns his customers by persuasion. The scale of his operation is determined by the degree he provides his customers with value. In the news media, success is determined by the businessman’s ability to provide his customers with relevant and accurate content. The trend toward broadcast media consolidation is driven by a simple dynamic: it is more cost effective if unprofitable duplication in broadcast media is eliminated.

Yet Howard Dean believes he can act as Caesar (or more accurately, Teddy Roosevelt) over media businesses, on the grounds that he is displeased with the content they generate. So much for the First Amendment right to speak free from government coercion. And, as Dean revealed on Hardball, the principle that drives him is based in large part on his personal whims (i.e, News Corporation is a target, GE is not).

The argument that media consolidation somehow threatens local coverage is bankrupt. In the age of the Internet and desktop publishing, where the costs to creating a niche media presence are so low as to be almost negligible, it is within practically anyone’s grasp to cover any news story that interests them.

The idea that government has the right to check one business model in the favor of another is also bankrupt. No business has the right to exist at the cost of the political destruction of its competitors. The only people who have a right to decide the fate of a business are a business’s owners, by choosing to stay in business or not, and its customers, by choosing to patronize the business or not.

And what has been forgotten in the media consolidation debate is that broadcast spectrum is a property deserving of the same protection afforded any other property. Rather then treat broadcast spectrum as a public good, the broadcast spectrum should be treated as a private property owned by those who develop it. Just because the broadcast media uses radio waves to communicate with its customers does not mean that it forfeits its rights.

Dean’s campaign is not the first time an anti-capitalist has presented himself to the electorate in capitalist’s clothing. Like Teddy Roosevelt before him, Dean attacks the alleged "malefactors of great wealth." And just like Roosevelt, when Dean speaks of the “bad traits of capitalism,” he means nothing less then self-interest. What else motivates a capitalist? It is not avarice that creates new ideas and innovations and brings them to market. It is pride, productivity and reason.

Yet it remains to be seen whether America’s proud, productive and rational will mount a better defense of their freedoms then their forbearers did under Roosevelt. Rather then worry about how deeply media companies penetrate every single community, as Howard Dean cliams, we ought to worry about how deeply government squelches the rights of every single individual.

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